Value chain is an organization’s enterprise that explains the scope of activities needed to provide products or services. The value chain in health care includes producers, health organizations, distributors, professionals (doctors, and nurses), and health consumers (Pitta & Laric, 2004) . The value chains help healthcare increase its efficiency so that it can improve its significance for the minimum probable cost. There is a need to incorporate a string of value in healthcare to add value to the opportunities. This paper examines how healthcare determines their cost in their value of chain and the importance of understanding a walking map.
Healthcare organizations determine the cost of their value chain through value addition. The value chain is composed of two sections: the main activities and the secondary activities. Some primary health care activities include ambulance services, admissions of patients, treatments diagnosis care, marketing hospital strategies, and check-ups to patients (Buttigieg et al., 2016). Health care providers apply value addition on these services to improve the quality of care and customer satisfaction. For instance, ambulances that respond to emergency cases have doctors who can offer treatment to patients in critical conditions before arriving in the hospital. This helps in preparedness in transport and staff, which requires keeping aside any cost required in such processes.
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Healthcare organizations have integrated health care facilities. They have created outpatients' departments that offer clinical services to patients who require minor check-ups. Healthcare organizations have also built extended care facilities and convalescent care facilities for patients who require admissions. Healthcare organizations buy their supplies in large quantities to ensure that there are continuous services to their patient. They also encourage people to go for early diagnosis to determine the possibility of sickness and, hence, prevent illnesses (MedlinePlus, 2020) . This helps the organization reduce the cost of treating the patients, such as admissions and buying medicines. Health care organizations have the responsibility of keeping people's health and improving their quality of life.
The healthcare organization also apply support activities to cut their cost in the value of the chain. Some of the main activities include the organization’s frameworks, HRM, technology, and procurement services management. The health organizations determine the cost of chain value by creating an enabling information platform that would improve the standards of services, such as advertisements of tenders and also management systems, which can improve health services within the organization (Reid et al., 2005). The organization can also establish human resource management to cater to the employee’s needs, supply chain management to supply healthcare with the required medical equipment necessary to cater to their clients.
A walking map in the value chain is a process used to identify the major activities related to healthcare services and is usually used to incorporate strategies to identify performance improvement opportunities. The walking map enables the healthcare organization to better understand the customers as the primary shareholders within the organization. Customers are the most essentials connections in the value of the chain. The walking map enables the healthcare organization to walk hand in hand with the customers to view the organizational chain from the standpoint that potential customers consider the organization's efficiency and effectiveness. It will provide proper communication channels to many clients, hence providing corporate strategies, business continuity, and adequate evaluation of the risk that might occur on-chain value. A walking map is an essential tool in the value of the chain in identifying the needed strategies to improve the performance of the organization.
In conclusion, the value of the chain is essential in explaining the activities of an organization. It ascertains the value-adding opportunities in the activities of the healthcare organization. The organization analyzes primary and support activities that help to get the necessary resources and supporting organizational objectives. The walking map helps healthcare organizations to understand their customers better. Healthcare organizations should utilize the value of chain and walking maps in their operations to improve their operations and provide better services to their customers.
References
Buttigieg, S. C., Schuetz, M., & Bezzina, F. (2016). Value Chains of Public and Private Health-care Services in a Small EU Island State: A SWOT Analysis. Front Public Health, 4 , 201. doi:10.3389/fpubh.2016.00201
MedlinePlus. (2020, June 02). Medical Encyclopedia . Retrieved from MedlinePlus: https://medlineplus.gov/ency/patientinstructions/000870.htm#top
Pitta, D. A., & Laric, M. V. (2004, December). Value chains in Health Care. Journal of Consumer Marketing, 21 (7), 451- 464. doi:10.1108/07363760410568671
Reid, P. P., Compton, W. D., & Grossman, J. H. (Eds.). (2005). Building a Better Delivery System: A New Engineering/Health Care Partnership. Washington, DC: National Academies Press. doi:10.17226/11378.
